Red Deer Real Estate Blog

Common questions we get as REALTORS often surround the deposit.  The deposit that accompanies an offer to purchase can be one of the most crucial pieces of the contract, as well as one of the most confusing for some buyers and sellers.

How much do I need for a deposit?

When it comes to an offer there are two competing sides, one that wants as big of a deposit as possible, and the other wants to give up as little as possible.  There is no set amount of what is acceptable.  The amount needed varies with each buyer and seller, the details provided on financing terms, the possession date, the supply and demand in the market, and the two associates that are representing the two parties and how ell they represent both side.  Yes, the negotiating plays a part.  A winning strategy often involves your buyer representative advocating on your behalf the virtues of you as a buyer and why your deposit is as written.  They may recommend that you provide an initial deposit as well as additional(s) deposit(s).  All of the strategies your agent employs will depend on the market for that property.

Is my deposit cheque for my offer cashed?

Yes.  Section 3.2 of the offer to purchase states:

3.2 The Initial Deposit shall be deposited no later than the third Business Day following the day that Final Signing occurred (as per clause 15.1). Additional Deposits shall be deposited no later than the third Business Day following the day the Additional Deposit is received by the brokerage.

Is it part of the purchase price?

Yes it is.  the deposit(s) plus financing plus any additional monies down equals the total purchase price.

Can I get my deposit back if something changes?

If that something is part fo the contract such as your conditions.  subject to financing or inspection for instance.  If you are unable to get financing or the inspection reveals something unsatisfactory to you then…

Yes you will get your deposit refunded according to section 3.5 states that following:

3.5 The Deposits shall be held in trust for both the Seller and the Buyer and shall be:

(b) refunded forthwith to the Buyer if this offer is not accepted;

(c) refunded forthwith to the Buyer upon the Buyer’s cheque clearing the brokerage’s trust account if a condition is not satisfied or waived (as per clauses 8.5 and 8.6) or the Seller fails to perform this Contract; and

When does my deposit got to the seller then, how does that work?

3.5 The Deposits shall be held in trust for both the Seller and the Buyer and shall be:

(d) forfeited to the Seller if this offer is accepted and all conditions are satisfied or waived and the Buyer fails to perform on this Contract.

At this point it is common for people to ask, “How do I lose my deposit then?”

A REALTOR friend of mine from Kelowna Century 21 Assurance Realty Jason Neuman, recently blogged “Top 10 Things Not to Do Before Closing“.  I am “reblogging some of it here below, enjoy and Thank You Jason for the great post.  For the full article make sure you check out Jason’s Blog post.

The Top 10 Things not to do before closing in a David Letterman format, starting with:

10. Make large undocumented bank deposits

9. Fail to disclose you’re on probation with your employer, maternity leave or disability

8. Close credit accounts with zero balances

7. Co-sign a mortgage or loan for someone else

6. Change your job from full-time to part time

5. Doctor your employment or financial documents

4. Spend your down payment or closing cost money

3. Apply for new loans or credit

2. Stop paying your bills on time

1. Quit your job!

Sincerely, Jason Neumann

 

I’ve experienced this happen when I was representing a seller.  The buyer sold their home, and went shopping for a new truck and a couple of quads before they took possession of the home I had listed for sale.  The bank declined to forward the money as the buyer had now increased his debt load and no longer qualified.  Just because the bank says today you are approved does not mean it will not change.  Follow Jason’s list, don’t do any major shopping or make big changes to your life until after you’ve moved in.

 

Your Friend in Real Estate,

Patrick Galesloot

@pgalesloot on Twitter

 

Recently reported to you Red Deer Real Estate 2009 Market Update and Beyond

As mentioned we captured more data and presented to our associates recently so that they could better meet your real estate needs.  If you have any questions on the real estate market and how your home is affected please feel free to contact one of our Century 21 Advantage associates.

Enjoy The Slideshare Below,

Your Friend in Real Estate,

Patrick Galesloot

@pgalesloot on Twitter.

We finished 2009, the end of the first decade of the “New Millennium”.  This month we’ve been busy returning to work focusing on new goals for the new Year.  At Century 21 Advantage we have also been preparing for our kick off meeting.  This is the meeting where we present tips, tools and information to our associates so that they can better serve your real estate needs.  This year that involved gathering not just a month or years worth of data but packaging that for a decade and really comparing last year to where we have been in the real estate market for Red Deer.

The real estate data for the last year compared to previous years tells us a great deal.  We can’t dwell on the first three months of 2009, as we know we experienced an economic down turn not like another.  We are still building from that.

The chart below illustrates the supply and demand of the Red Deer MLS real estate market.  All data was collected from the Central Alberta REALTORS® Association.

As you can see from above, there was a sharp increase in “inventory”/supply (the number of listings).  That occurred two years ago and we’re still dealing with the effects.  While sales rose with the increased real estate activity that rise was not enough to absorb the excess supply of properties for sale.  As the market slowed down the investors (flippers and speculators) left the market first leaving less buyers available to purchase the homes offered for sale.

Sales volume for Red Deer totaled 1701 residential properties which was slightly higher than 2004 and less than 2005.  The big difference and what put downward pressure on the price was the number of listings.  2009 was a very competitive year for pricing if you were looking to sell your home.  The good news is we had a large number of home sthat did in fact sell.  2009 was still a buyers market year overall and had moments and trends that showed the real estate market moving into a “balanced market”

So what were people buying or more specifically price ranges?

Buyers were active in all price ranges.  The most active price ranges were:

• $200,000 – $250,000 with 301 sales
• $250,000 – $300,000 with 412 sales and
• $300,000 to $350,000 with 335 sales respectively.

It should be no surprise then all those sale centered around $300,000 our average sale price for 2009 was $290,187.

How does this compare to 2008?

2008 definitely had more sales recorded with a total of 1950 MLS sales in 2008 versus 1701 in 2009.  With more sales in higher price ranges in 2008 the average price fell to $290,187 from in $301,363 average sale price in 2008.  2009 experienced a 12.77% decrease in sales volume and a 3.7%% decrease in the average price.

I think Red Deer real estate performed quite well despite the adverse market conditions.  The average price drop was not as bad as some predictions and we certainly faired better than other markets.  So was 2009 all bad or a real mixed bag?

It was a mixed bag.

. Total # Listings 2009 2009 Total # Sales 2009 Average Sale Price 2009 DOM . JANUARY 218 62 $239,821 53 . FEBRUARY 276 113 $300,465 50 . MARCH 280 123 $285,407 48 . APRIL 305 178 $295,447 48 . MAY 331 197 $309,492 46 . JUNE 299 213 $291,287 46 . JULY 281 179 $289,213 49 . AUGUST 250 163 $289,122 46 . SEPTEMBER 269 122 $297,656 36 . OCTOBER 256 151 $293,268 48 . NOVEMBER 206 114 $291,957 47 . DECEMBER 124 85 $298,512 50 . Total: 3095 1700 $290,137 47.25

Summary:

Supply and Demand improved through out 2009 aided by interest rates, and a strengthening economy.

Interest rates were the big story of 2009.  If you are a home owner or you purchased anything that required financing I think a big thanks is in order to the Bank of Canada and the Finance Minister.  The decision to reduce interest rates and committed to hold them until mid 2010, was a tremendous boost to the real estate market.  New buyers came back with confidence knowing that the rates they were locking in at were incredibly low and that mitigated any risk that price decreases would have.

Along with low interest rates came mortgage penalties in the form of interest rate differentials.  We had many more clients that wanted to move and take advantage of market conditions only to be held back due to the large cost of discharging the existing mortgages.

Overall the slide in price slowed down and should turn around in 2010 with modest increases expected.  Buyers can go ahead knowing that they still have the luxury of selection and bargaining power for some price ranges.  It is important to note that inventory levels dropped significantly December 31 and many of those homes have not been re-listed creating an environment with more sales close to list and more competing offers occurring.

2010 prediction:  3.5% increase in sales and price, and natural gas demand recovering and strengthening gas prices.

Your friend in real estate,

Patrick Galesloot

@pgalesloot on Twitter.

P.S

Watch for a slide share power point show with more stats to follow.

All data was collected from the Central Alberta REALTORS® Association.

Open Houses for Saturday January 23, 2010
254, 103 Hermary Street	Hosted by:	Bob Wing	1:00-2:30pm
209, 5330 47 Avenue	Hosted by:	Bob Wing	3:00-4:30pm
134 Donnelly Crescent	Hosted by:	Rod MacWhirter	2:30-4:00pm
222 England Way	Hosted by:	Tim McRae	2:00-4:00pm
226 Wildwood Avenue	Hosted by:	De Galesloot	1:00-3:00pm
49 Asmundsen Avenue	Hosted by:	Ben Ordman	2:00-4:00pm
59 Armitage Close	Hosted by:	Brenda Bowness	2:00-4:00pm
105 Oldring Crescent	Hosted by:	Christine Bourke	2:00-4:00pm
Out of Town Open Houses for Saturday January 23, 2010
9 Pioneer Way              Blackfalds	Hosted by:	Tamara Janzen	2:00-4:00pm
Open Houses for Sunday January 24, 2010
221 Creekside Estates	Hosted by:	Ben Ordman	2:00-4:00pm
19, 51 Carpenter Street	Hosted by:	Rob White	2:00-4:00pm
104, 60 Lawford Avenue	Hosted by:	Avril Evans	2:00-4:00pm
Out of Town Open Houses for Sunday January 24, 2010
32 McKenzie Road	Hosted by:	Tim McRae	2:00-4:00pm
4821 Womacks Road       Blackfalds	Hosted by:	Richard Pochylko	2:00-4:00pm
5505 Prairie Ridge Ave     Blackfalds	Hosted by:	Richard Pochylko	2:00-4:00pm
9 Pioneer Way              Blackfalds	Hosted by:	Tamara Janzen	2:00-4:00pm
See all Our Opens Houses @ www.reddeeropenhouses.com

The Real Estate market in Red Deer has been very active in the first 3 weeks of 2010! This is an excellent time for first time buyers to get into the Real Estate market and for existing Central Alberta home owners to make a move up to a larger home. Interest rates are predicted to remain low at least until the middle of 2010, but there is some talk of increasing the minimum downpayment from 5% to 7 or 10% so waiting to buy may not be a wise decsion. Prices in the starter home category are starting to creep up slightly and multiple offers are not uncommon, but in the higher price ranges, while homes are selling, the demand is not as high so there are some good buys to be had. Red Deer Real Estate is still in a buyers market at this time so go ahead and BUY your new home or investment property soon.

Olympic Torch comes to Red Deer today.

The festivities are planned tonight at the Red Deer Westerner grounds.  We hop e to see you there.  We are very excited and proud to be a sponsor for the event.  I’ll be there with my kids for this historic occasion and I know many of our associates, friends, family members and colleagues will also be there or along the parade route.

Still Looking for information on where and what the deal is?  Click on the links below, we’ve got you covered.

• Red Deer Facebook Fan page for the torch relay:  
• City of Red Deer information page:
• Road Closures:
• Torch Relay Interactive Map

Olympic Torch Relay Community Celebration Date:

January 15, 2010 Time: 5:00 to 9:00 p.m.

Location: Westerner Park – an outdoor event!

Cost: It’s free and you’re invited!

Limited Paid Parking will be available at the Westerner Grounds. Park & Ride Services will be available for the event at both Parkland Mall and Notre Dame High School (50 Lees Street).

 

Have fun tonight,

Patrick